A new survey indicates that most landlords are unprepared for Making Tax Digital (MTD), the government’s tax overhaul set to take effect this April. Only one in eight landlords say they understand the new rules, while nearly nine in ten express concern about the changes.

The findings add to growing worries about the potential impact on tenants. Recent research by August found that 97% of landlords plan to increase rents, with compliance and administrative costs cited as key factors.

Under MTD, landlords will be required to submit rental income and expenses to HMRC every three months using approved software. Errors, missed deadlines, or incorrect reporting could result in penalties.

Industry experts warn that landlords who are unprepared may face fines, professional fees, and additional administrative costs—expenses that are often passed on to tenants rather than absorbed.

Samuel Cope, founder of rental app August, warned the changes could push more landlords out of the market and drive rents higher.

He said: “Landlords are under pressure and many don’t yet understand what’s required of them,” he said.
“When landlords are squeezed, tenants feel it, through higher rents, tougher terms and fewer homes to rent.”

He added: “The problem isn’t that landlords don’t want to comply, it’s that the system is too complicated. With August, landlords can see exactly what HMRC needs, track everything automatically, and submit updates direclty from the app. When reporting is easier, landlords make fewer mistakes, and that helps keep costs down for tenants too.”